US Dollar Index Drops on Projected Weakness

US dollar is struggling today, with the dollar index falling on projected weakness. Remarks from the Federal Reserve, as well as the latest moves by China, are weighing on the greenback today.

Concerns that easing might not be over for the US dollar are rising right now, thanks to the latest comments from the currency Chair of the Federal Reserve. Ben Bernanke indicated that, even if the jobless rate in the United States falls to 6.5 per cent in the next little while, the Fed might not raise interest rates. The idea of low rates and loose monetary policy for the greenback is weighing on the currency.

Also contributing to dollar weakness today is the news out of China. Chinese officials say that they want the yuan to strengthen, and will therefore ease its dollar buying. The news is putting downward pressure on the greenback, and it’s obvious that China is ready to become a world player, and that it wants the yuan to be seen as a major currency.

At 14:19 GMT the US dollar index is down to 80.6430 from the previous close at 80.7040. EUR/USD is up to 1.3540 from the open at 1.3539. GBP/USD is up to 1.6171 from the open at 1.6126. USD/JPY is down to 99.9300 from the open at 100.1940.

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